South African state company Transnet has successfully raised -billion (R8.3-billion) debt in the US - a significant vote of confidence by international investors both in the company and in the country's state-led infrastructure programme

On Friday, Transnet announced the successful pricing of the -billion, 10-year bond at a coupon (interest) rate of 4.00%. The bond was competitively priced at 262.5 basis points above the 10-year US Treasuries.

The bond is the highest amount of money that has ever been raised by Transnet in a single bond issuance without a government guarantee. At 10 years to maturity, it is also the longest tenor ever issued by Transnet in international debt capital markets.

The bond issuance was "significantly oversubscribed, confirming the confidence of the international financial markets in the South African government's recently announced infrastructure programme as well as Transnet's strategic direction," the company said in a statement.

Transnet will use the proceeds from the bond issue to help finance its R300-billion capital investment programme, which is focused on rejuvenating and modernising South Africa's rail, port and pipelines logistics infrastructure.

In February, President Jacob Zuma announced that South Africa would be embarking on a massive, state-led infrastructure drive in which more than R800-billion would be invested until 2014.

Source: SouthAfrica.info
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